Computer Science > Cryptography and Security

Title:
Effect of Bitcoin fee on transaction-confirmation process

Abstract: In Bitcoin system, transactions are prioritized according to transaction
fees. Transactions without fees are given low priority and likely to wait for
confirmation. Because the demand of micro payment in Bitcoin is expected to
increase due to low remittance cost, it is important to quantitatively
investigate how transactions with small fees of Bitcoin affect the
transaction-confirmation time. In this paper, we analyze the
transaction-confirmation time by queueing theory. We model the
transaction-confirmation process of Bitcoin as a priority queueing system with
batch service, deriving the mean transaction-confirmation time. Numerical
examples show how the demand of transactions with low fees affects the
transaction-confirmation time. We also consider the effect of the maximum block
size on the transaction-confirmation time.